GAZ Group announces 1H 2017 financial results

GAZ Group, a part of Russia’s leading industrial diversified group Basic Element, reports the results of its performance for the first half of 2017 in accordance with international financial reporting standards (IFRS).

During the period, GAZ Group has improved its financial results thanks to increased sales of generation NEXT vehicles, as well as cost reduction that the company continues to carry out in the terms of negative macroeconomic factors adversely affecting the market conditions and production costs. Further more, the Company retained leading position in all key segments of the market of commercial vehicles.

The Company's revenue in the first half of 2017 grew by 16% and amounted to 67.4 billion rubles year-on-year. Revenue increase was due to the growth of sales volumes of the NEXT generation vehicles. Also the GAZelle and GAZon NEXT sales on the Russian market were up by 29% reaching 14 thousand vehicles. Sales of buses of all classes and applications increased by 22% up to 4,1 thousand.

Sales growth and boosted production efficiency in the first half of 2017 enabled the Company to get
1.1 billion rubles of profit against loss of 2.4 billion rubles compared to the same period of 2016. The revenue rate per one employee grew by 11% and reached 257 thousand rubles per month.

Vadim Sorokin, GAZ Group President:

- GAZ Group reports the growth of financial results in 1H 2017 despite negative macroeconomic factors. High cost of loans, the cost of materials and energy, low purchasing capacity in the market of commercial vehicles do not contribute to positive dynamics of the economy. Further more, the whole team of GAZ Group again proved its ability to join efforts aiming to achieve effective results. In the first half of the year, we reduced the costs by 1.7 billion rubles. Accumulated resources were targeted at the development of new vehicles. This year we expanded the product line on several directions: increased the payload capacity of light commercial and medium-duty vehicles, developed a right-hand drive version of vehicles and other export derivatives, created electric vehicles for passenger transport, produced new all-terrain vehicles. Premieres of these and other innovations will take place within a few days at the Comtrans Exhibition in Moscow. Future launch of these models to the market will allow the Company to enter new segments of the Russian market and to expand its presence in export markets.